Engineering conglomerate Larsen & Toubro (L&T) doubled its net profit year-on-year for the quarter ended June 30 to R 967 crore, helped by new orders and gains from the sale of stakes it held in companies like L&T Finance Holdings and City Union Bank.
The company posted a consolidated turnover of R18,975 crore for the June quarter, 10% higher than a year earlier.
L&Ts June quarter results surpassed Street expectations. A Bloomberg poll of L&Ts earnings estimates put out by analysts tracking the company had pegged its net profit to come in at R800 crore and revenues at R11,587 crore.
L&Ts financial performance in the April-June period was aided by an exceptional gain of R249 crore. This was on account of L&T selling an 8% stake in its financial subsidiary L&T Finance Holdings during the quarter to comply with rules laid down by the Securities and Exchange Board of India that mandates the maximum level of promoters holding in a listed company at 75%. The conglomerate also sold its entire holding of 4.55% in City Union Bank, held through L&T Finance Holdings, during this period. L&Ts June quarter earnings also take into account profit from the sale of its stake in Dhamra Port, which it sold along with Tata Steel to Adani Ports and Special Economic Zone in May.
A quarter of L&Ts total consolidated turnover came from jobs executed overseas. However, this contribution declined 16% y-o-y because much of the pick-up in international orders has started in the last few months and L&T is hopeful that should reflect in sales over the next few quarters.
The companys total expenses surged 8.4% y-o-y to Rs 17,267 crore. This was primarily on account of a 12% increase in staff cost, which was due to additional hiring of 6,000 people at the group level. L&Ts performance could have looked even better but for a 45% surge in depreciation charges in the June quarter over the previous year, on account of changed guidelines to calculate depreciation in line with the new Companies Act.
L&Ts operating profit was up 34% over the same period a year ago at Rs 2,515 crore and operating margins improved 240 basis points to 13.3% during the quarter.
The companys consolidated order inflows during the quarter rose 11% y-o-y to Rs 33,408 crore, while its total order book stood at